Importance of Standard of Living (1299 Words)

What do you mean by standard of living?

Standard of living is mostly about material characteristics. It refers to the different good and services and their quantity which are purchased by single or group of person or any country.

Standard of living talks about income, economic and political constancy or stability, safety, climate, environmental quality, gross domestic product and national economic growth.

This means that standard of life is all about the luxuries, necessities and luxuries of a person. Very often people confuse standard of living by attaching the factors like freedom, satisfaction and relationships.

They are actually not included in the standard of living as they are non-material characteristics.

This is why they are included in quality of life. But standard of living and quality of life are sort of similar and are closely related.

How is standard of living measured?

The standard of living can be measured by Gross Domestic Product (GDP) per capita. This is calculated by finding out the country’s GDP and dividing it by the population of the country.

Gross Domestic Products refers to the total quantity of goods and services that a country produces within its boundaries in a year.

Standard of living can also be measured by Gross National Product (GNP) per capital. This is like GDP itself. The only difference is that in this case income of the people is what matters.

United Nations uses HDI, that is, Human Development Index, to measure the standard of living. HDI measures through four factors which are GNI per capita, Life expectancy at birth, adult literacy and school enrollment.

What are the factors affecting standard of living?

Every country’s government aim and want to provide a proper and good living to its entire people. But this depends on the economic capability of the country.

As every government cannot provide everything to all the people, there are differences and inequality among people of different countries.

Standard of living is affected by many factors. Some of the factors include: Level of National Income and Output, Level of Productivity, Terms of Trade, Size of Population, Distribution of National Income, General Price Level, Level of Education, Tastes and Temperament, Social customs and Conventions etc.

All these factors are the standard of living of a country as well as of an individual or a family.

The main reason there are differences and qualities between the different countries is due to their national income. National income varies due to the total production of the country.

If the total production is more in a country, the national income increases and people of that country can enjoy and have a good or high standard of living. Even in a family or in an individual person’s life, income matters.

The family’s or person’s income affects the comforts, luxuries of necessities of the people. A person who has a high income will obviously have a high standard of living.

If a country is able to produce enough goods and services, only then they can provide people the necessary standard of living.

A higher productivity helps to increase the national output of the country. The population size whether it is about the country or in a family is a very important factor which affects the standard of living.

If the national income of the country or the total income of the family is less than the population size or the family size, then the standard of living will be lower.

While if the population size is less compared to the income, then the standard of living also becomes better.

People who get proper education or have higher level of education will surely have high standard of living compared to the ones who are either uneducated or have not received any proper education.

Even the tastes and temperament of a person affects the standard of living.

Even the social customs and conventions are an important factor. If there is a social custom in the family of following something, a person will obviously follow that so that people do not think he is lagging behind. Just income is not necessary to determine the standard of living of a person.

It is also affected by the general price level. This means that if standard of living is also determined by what things a person is capable of buying with the income he or she has.

How can standard of living be improved?

The standard of living people is entirely dependent on the ability of the country to produce goods and services for them.

If the goods and services are not enough then the people will not be purchase any of them no matter how much income they have.

The production of goods and services in turn is affected by other factors like capitals, resources and labour. If the production is increased then standard of living will also get positively affected by it.

The ability of the country to produce goods and services can be improved with the help of many Government policies.

Some of these policies include: encouragement of domestic investment and saving, good health sponsorship, support of free trade, endorsing the research and development of new technologies, encouragement to invest abroad, nurture education and uphold property rights and maintaining political stability.

All these will help to find out what the reasons for lower economic growth. The government should focus on all of them so that the economic growth will rise. Just forming policies like these is not important.

They need to be discussed properly, formulated and then finally imposed in reality. Until and unless this happens there is no use of making policies.

Why is standard of living important?

Every human being on this earth wishes to have a proper standard of living. But due to less capabilities and economic power, everyone is not able to get that type of standard of living which they want.

It is not easy to get a proper or high standard of living. One needs to work hard, sacrifice and dedicate oneself to get that standard of living. But why is standard of living considered so important?

Everyone wishes to have a proper or high standard of living and enjoy all the amenities available in and around them in their life.

In order to have a basic standard of life one needs to have that much of earnings. Without enough earnings one cannot expect to have even the basic standard of living.

If one has enough earnings, then it is obvious their standard of living will be proper. If the standard of living is proper they do not have to be dependent on others.

Maintaining their own standard of living teaches a person to work hard and be independent.

Maintain a standard of living also makes a person to learn and maintain their economic condition. If one generation is maintaining their standard of living, it will be easier for their future to get a proper standard of living.

If one person in a family or a close friend has problems to maintain a standard of living, they can always get support or help from others who have a proper standard of living. Standard of living for most of the people is about the money they have.

They feel that if money is there, they will not have to face any problem with their standard of living. As for such people money matters in order to have a standard of living.

So, according to them in order to achieve that standard of living which they want, makes them work hard so that they can earn enough to satisfy their wants.

This means that standard of living first make people think about money and then makes them understand that they need to work a lot so that they get the standard of living as per their wish. Standard of living helps to improve the quality of life.

As everyone wants to have a proper standard of living, it is this concept of life that makes people think about income, employment, affordability, economic growth and stability, safety, environmental conditions, comfortability, basic facilities of life and many other things.

Standard of living also determines the economic growth of a country. If the standard of living of the citizens of a particular country has increased greatly, it positively affects the economic growth of that country.

Standard of living helps people to understand the objective factors of life like environmental quality, Gross Domestic Product (GDP), poverty rate, life expectancy etc.